The present invention relates to methods and computer program products for Internet advertising. More specifically, the present invention relates to methods and computer program products for improving the effectiveness of word-of-mouth advertising by tailoring the advertisement for a product to individual users based on the user's social network and the product's lifecycle.
Word-of-mouth marketing refers to the passing of product information in an informal, person-to-person manner, especially in the form of recommendations. The product information may be passed on via various channels, such as during face-to-face conversations, over telephones, via emails, text messages, online chats and/or posts, etc.
Word-of-mouth marketing can be very effective, and thus is highly valued by advertisers. Many people, both consumers and marketers, believe that this form of communication has valuable source credibility. Some researches have shown that individual consumers are more inclined to believe word-of-mouth marketing than other more formal forms of promotion methods because the receivers of the word-of-mouth information tend to believe that the senders, often families, friends, or colleagues of the receivers, are speaking honestly and are unlikely to have any ulterior motives.
There have been many successful examples of word-of-mouth marketing, among which Google's™ email service, Gmail™, is a particular noteworthy case. Instead of spending a lot of money marketing Gmail™, Google™ initially gave out Gmail™ accounts to a small number of so-called power users and enabled these power users to invite their acquaintances to join Gmail™. In fact, at one point, a person could not obtain a Gmail™ account unless invited by an existing Gmail™ user. This created scarcity and the limited supply helped increased the demand for Gmail™. People who aspired to be like the power users were bidding for Gmail™ invites on eBay®.
A key to successful word-of-mouth marketing is to identify those individual users who are likely to pass the product information among their families and friends, e.g., the power users in the Gmail™ case. That is, people who are willing to pass the product information along to the others are more valuable to word-of-mouth advertisers. Another important consideration is the timing of the advertisement, i.e., what is the best time period during a product's lifecycle that the advertisement should be sent to the individual users so as to maximize the effect of the word-of-mouth marketing.